"Bitcoin Plunges 3.72% as Powell's Comments Spark Volatility Ahead of CPI Report"

Bitcoin's price reacted to Fed Chairman Powell's comments on quantitative easing, dropping 3.72% to $94.8K on Tuesday. The upcoming US Consumer Price Index (CPI) report is expected to drive market volatility, with potential reactions based on consensus alignment. BTC price attempted to rebound from Monday's low, with potential take-profit opportunities at $94.6K and rallies to $96.8K, $100K, and $101.5K.

Powell stated, "The policy stance is now much looser than before, and the economy remains strong, so there is no need to rush to adjust the policy stance. Inflation has eased significantly, but remains high." The upcoming US CPI might put additional pressure on the Fed to rethink its decision on interest rates.

On Tuesday, Fed Chairman Jerome Powell's comments on quantitative easing triggered a correction in Bitcoin price. Powell added, "WE WOULD USE QUANTITATIVE EASING ONLY WHEN RATES ARE AT ZERO." As a result, BTC's value traded at $96,131.0 on 9 AM after hitting a daily high of $98,218.0 and was down -1.98% on February 12.

The upcoming US Consumer Price Index (CPI) print today at 8:30 a.m. Eastern will play a critical role in setting the tone for Bitcoin and cryptocurrency markets in the short term. According to TradingEconomics, the Core US CPI MoM consensus is 0.3% compared to the previous print of 0.2%. The consensus surrounding headline inflation is that it remains the same at 2.9%.

Investors can expect three outlooks: higher than consensus, equal to consensus, and lower than consensus. Each outcome could profoundly impact risk-on assets like Bitcoin, cryptocurrencies, or stock markets, depending on market conditions.

CPI Matches Consensus, i.e., Headline and Core MoM/YoY as expected

In this case, the Fed will likely maintain the current rate trajectory as data align with forecasts. With easing stagflation fears, investor sentiment would be mildly optimistic.

CPI Higher Than Consensus

This outlook would create a hawkish sentiment and delay the